Electronics Production | March 06, 2007

Dell Remains Top PC OEM in 2006

Although Dell Inc. sold more PCs than any other OEM last year, 2006 will go down as the year of Hewlett-Packard Co. (HP), with the company racking up impressive market-share gains that allowed it to capture the top ranking in the second half, according to a preliminary market share estimate from iSuppli Corp.
U.S.-based HP in the fourth quarter of 2006 retained the leadership position it attained during the previous quarter, shipping 11.6 million PCs, up 21.1 percent from 9.6 million in the fourth quarter of 2005. This rise was more than three times higher than the overall PC industry's average of 6.3 percent growth during the same period.

In contrast, fellow American OEM Dell shipped only 9.6 million PCs in the fourth quarter of 2006, down 8.6 percent from 10.5 million during the same period in 2005. Dell was the only Top-5 PC OEM to report a decline in fourth-quarter shipments—both sequentially and year-over-year.

“HP's resurgence was the most remarkable event in the PC industry in 2006," said Matthew Wilkins, principal analyst, compute platforms at iSuppli. “The company clearly has momentum on its side. Furthermore, with Dell adjusting to its senior management changes—including the return of Michael Dell as the company's chief operating officer—HP is likely to continue to make gains."

China's Lenovo held onto third place in the fourth quarter of 2006, with shipments of 4.8 million, up from 4.4 million a year earlier. However, Lenovo's lead over fourth-placed Acer Inc. shrank from 1.3 million units in the third quarter to only 348,000 units in the fourth quarter. The closing of the market-share gap shows that Acer of Taiwan came on strong in the fourth quarter, with year-over-year unit growth of 42.7 percent.

The rankings of the Top-5 PC OEMs did not change compared to the third quarter, with Japan's Toshiba Corp. taking the fifth spot. Worldwide PC shipments in the fourth quarter amounted to 66.7 million units, up 11 percent sequentially and up 6.3 percent from 62.7 million during the same period in 2005.

Table 1 presents iSuppli's preliminary worldwide ranking of the Top-5 PC OEMs in the fourth quarter of 2006.

PC shipments on the rise
Despite HP's very strong second-half performance in 2006, the company was unable to knock archrival Dell from the No.1 spot for the entire year. HP retained the second-place position it held in 2005. However, HP closed the gap with Dell considerably for the year, with only a 2.4 percentage point difference in market share between the two companies in 2006, compared to 2.4 percentage points in 2005.

Table 2 presents iSuppli's preliminary top-five PC shipment ranking for the whole of 2006.

Third-ranked Lenovo achieved 7 percent market share in 2006, rising from 6.4 percent in 2005. However, Lenovo is facing a mounting threat from Acer, which attained a market share of 5.5 percent in 2006, up from 4.4 percent in 2005. Acer in 2006 increased its PC shipments at almost twice the percentage rate of Lenovo.

Battling the resurgence

On the semiconductor side, the year 2006 saw the escalation of the PC microprocessor war between Advanced Micro Devices Inc. (AMD) and Intel Corp. Pricing was a major weapon in this war, as was dual-core microprocessor technology for mainstream PCs. The next stage of this contest will be the battle to control the market for quad-core microprocessors in mainstream applications.

From a software perspective, the big news has been Windows Vista, with Microsoft Corp. launching the corporate version of the operating system during 2006, and the consumer version in early 2007. Corporate reaction to Vista was predictably cautious, and will continue to be so.


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